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Industry Groups Advise SEAB: Go Slow on New Programs

The Secretary of Energy Advisory Board (SEAB) Natural Gas Subcommittee should defer to state regulators -- and may find that many of its objectives are already being addressed by existing programs -- according to comments filed at the Department of Energy (DOE) by industry groups.

The Independent Petroleum Association of America (IPAA) "believes that existing programs, systems and efforts need to be fully considered -- including possible modifications of efforts -- before new programs are created," IPAA said in comments filed following the release of SEAB's 41-page report. "Similarly, some of the subcommittee's proposed actions need to be carefully structured and considered in the context of current or pending actions addressing the same issues."

Shale gas operations already have a "strong foundation...through robust state regulatory programs in most parts of the country," the American Petroleum Institute (API) said in comments it filed with DOE earlier this month. "Rather than deferring on the proper role of state governments, we recommend the subcommittee acknowledge the success that has been demonstrated through state-level programs." API said it was "concerned" that SEAB did not engage in a gap analysis to determine if items included in its recommendations are already addressed by state and federal regulators, academia, industry or third parties. API said it was also concerned that no benefit-cost analysis of the SEAB recommendations appeared to have been performed.

In its report, SEAB said a cooperative and coordinated effort by state and federal agencies and the industry to develop and promulgate "best practices" is key to winning the public's trust and to successful development of the nation's shale gas resources (see Shale Daily, Aug. 12). The subcommittee report essentially advocated creating a national culture of continuous technological improvement in the shale gas industry, and having those improvements put into place either at a state or regional level. The report said air and water quality issues were integral to any plan outlining the industry's best practices.

The subcommittee recommended that companies be required to disclose the chemical contents of fracking fluids, but according to both IPAA and API, an online registry -- fracfocus.org -- is already in place to meet that need. SEAB "has underestimated the potential for the registry and the advancements already made to relay chemical use on a well-by-well basis," according to API.

The online registry, which first became available in April (see Shale Daily, April 13), is a collaboration of oil and gas companies and two multi-state organizations: the Ground Water Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC). The website has been referenced by several states in recent legislative and regulatory initiatives "and we anticipate that this trend will continue," according to API, which said FracFocus "can accommodate full disclosure as envisioned by the subcommittee."

FracFocus is run by state regulatory agencies that "have the authority to acquire data that supplements the information that is regularly needed to manage production operations," IPAA said in its comments to DOE. "No federal agency has this expertise nor needs to acquire it." And making available through GWPC's Risk Based Data Management System (RBDMS) information already being submitted to the FracFocus website would meet the requirements of another SEAB recommendation -- improving public information about shale gas operations -- IPAA said.

In its report the subcommittee said the GWPC and the State Review of Oil and Natural Gas Environmental Regulation (STRONGER) -- a nonprofit that performs peer review of state regulatory activities -- were useful tools to educate the public and recommended that the federal government allocate $5 million to the two programs beginning in fiscal year 2012. Too few states participate in STRONGER's voluntary review of state regulatory programs, according to SEAB. In their comments with DOE, IPAA and API endorsed enhanced federal funding of STRONGER, RBDMS and FracFocus.

DOE said it received a total of 163 comments between the Aug. 11 release of the SEAB report and Aug. 17. A total of 63 respondents complained that the comment period was too short, DOE said. Others complained about the composition of the subcommittee, which had been hotly debated before the report was issued (see Shale Daily, June 7; May 11).

The subcommittee is developing a timeline for federal and state regulatory agencies to implement the recommendations contained in its initial report (see Shale Daily, Aug. 17). A final report is due Nov. 18.

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